What is an Interest Rate?
An interest rate is an amount charged by a lender to a borrower for the given monetary support in the form of debt. Based on the principal amount, the interest rate is calculated in percentage. Interest rates are equated as per different periods, such as monthly, quarterly, or bi-annually. The annual interest rate is applied over one year. A fixed interest remains constant throughout the loan tenure, whereas a floating rate of interest can fluctuate. Longer the tenure higher will be the interest paid.
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